probate

What is Probate?

Probate is the general term used to describe the estate administration process – sorting out the affairs of a person who has died.

An estate is collectively all property, savings, investments, personal belongings etc. belonging to the person who has died. These are also referred to as ‘estate assets’. Estate assets can be owned by the deceased in his/her sole name, jointly with someone else, in a partnership, in a business or in a trust.

Part of this process is obtaining the ‘Grant of Representation’ which is a certificate that shows that the estate assets can be safely handed over to the Personal Representatives (PRs) who are either Executors named in the deceased’s Will or Administrators (next of kin in order of priority dictated by the law) if there is no Will.

The type of Grant of Representation issued depends on whether the deceased left a Will. If there is no Will it will be a Grant of Letters of Administration. If there is a Will it will be a Grant of Probate. The application is made by signing a Statement of Truth and submitting this to the District Probate Registry.

Do I need Probate?

Not all estates will require a Grant of Representation. Estates which are worth less than £5,000 do not usually require one and some organisations will release assets to a PR without one but they each have their own requirements and will need to be contacted. Where there is a property in the estate which needs to be sold a Grant of Probate will always need to be obtained and usually where the property is to be transferred unless it is passing to a joint owner by survivorship.

What are the initial steps?

• The death must be registered at the deceased’s local Register Office within 5 days of death. When registering the death obtain multiple copies of the Death Certificate (we recommend 10 copies) as originals will be needed for various financial organisations.
• Locate the Will. Often an original Will can be located at the deceased’s solicitor’s office or at their bank. The Will may contain instructions for the funeral. If there are no instructions it is up to the PRs or the relatives to decide how to proceed.
• Contact a funeral director to make arrangements for the day of the funeral. The funeral can be paid directly from a bank account of the deceased, even if the account has been ‘frozen’ as part of the probate process.

What is Estate Administration process?

The deceased’s estate is administered by their PRs. The PRs are the only people legally entitled to access the deceased’s property and belonging. PRs need to:

• Ascertain the extent of the deceased’s estate – work out what the deceased had by way of savings, investments, property, shares, policies, mortgage, loans etc.
• Write to all the relevant organisations to obtain written date of death valuations for all assets and liabilities identified.
• Complete the appropriate Inheritance Tax forms.
• Pay debts and taxes (which may involve selling some items to raise cash).
• Collect in the assets – sell or transfer them.
• Distribute the estate in accordance with the Will or the rules of Intestacy.

Is Inheritance Tax payable?

Irrespective of whether Inheritance Tax is payable or not, an Inheritance Tax return must be completed and submitted to the District Probate Registry where no Inheritance Tax is payable or HM Revenue and Customs (HMRC) where Inheritance Tax is due. Currently Inheritance Tax is payable at 40% on estates worth over £325,000. However, there are exemptions and allowances which can eliminate or reduce the amount due.

Taxable estates are generally more complex and there are additional procedural requirements placed on the PRs. The tax due must be paid before a Grant of Probate is issued and before the estate can be distributed.

What are the next steps?

Once a Grant of Representation is obtained the PRs need to:

• Decide what to do with the deceased’s assets – sell them or transfer them to the beneficiaries or a mixture of both.
• Obtain and complete the appropriate forms to lead to the sale or transfer. The aim at the end of the process is that no assets are left in the deceased’s name. This part of the process can take quite a long time.
• Collect in the assets and pay all outstanding debts and liabilities.
• Consider if any Income Tax or Capital Gains tax is due. This will be for the period from the date of death to the date the estate was deemed to be finalized and so it can only be considered at the very end of the estate administration. Prepare any calculations and/or tax returns for submission to HMRC.
• Prepare estate accounts showing how the estate has been dealt with, how much money has been collected, how much has been paid out either to repay debts or fees for the administration process and therefore how much is left for the beneficiaries. The estate accounts should be signed as approved by the PRs and all residuary beneficiaries. This ensures financial transparency.
• Once approved estate accounts are received from all executors and beneficiaries, final distributions can be made ensuring receipts are obtained for all payments.

How long will Estate Administration take?

This will vary from estate to estate but on average, we would expect a non-inheritance tax paying estate to take 6 – 9 months to complete and an inheritance tax paying estate to take 9 to 12 months to complete.

How much does it cost to administer an estate?

There are costs involved in administering an estate whether or not you employ a professional or deal with the administration yourself. These are called disbursements and are costs related to probate matters that are payable to third parties, such as court fees, bankruptcy searches and statutory notices.

The probate court fee is currently £273 plus £1.50 for each additional copy required.

For more details of potential costs and disbursements please refer to our Probate Costs and Timescales factsheet.

What are the Legal Fees?

As a guide, our fees for a full estate administration will typically start from £3,000 to £5,000 (plus VAT and disbursements) for a straightforward estate. For more complex estates or estates with numerous assets, properties, farmland or foreign assets the fees will typically be in the region of £10,000 to £15,000 (plus VAT and disbursements).

Our fees for a full estate administration are charged on an hourly rate depending on the experience and qualification of the person carrying out the work. Most often, an estate administration will be carried out by a mix of the team members as work is allocated to the appropriate grade.

For more details and our current hourly rates please see our Probate Costs and Timescales factsheet.

Who pays the costs?

All estate administration costs are paid from the estate itself. However, you may be required to make some upfront payments such as the probate court fee, house insurance (if applicable), utility bills (if applicable), some funeral costs, death certificate fee and other minor payments. Please keep a list of all the payments you make on behalf of the estate and these will be refunded to you once the estate has released money from the deceased’s assets.

When is a specialist Probate solicitor required?

Many people deal with Probate on their own, particularly if they have the skills and time. But more complex cases may require the services of a specialist Probate solicitor. Dealing with Probate carries obligations and personal liabilities for those involved who may not be fully aware of what is required of them. In particular you should consider using a professional:

• Where you do not have sufficient time or expertise to deal with the estate.
• Where charities are named as beneficiaries.
• Where beneficiaries are uncertain or missing.
• If the Will has been contested or there are concerns about the validity of the Will.
• If no Will was left.
• If the Will was complex or featured Trusts.
• Where foreign property or assets are involved.
• If the estate was insolvent.
• When the estate may be liable for inheritance tax.
• If the estate contains business or agricultural assets.

How Geoffrey Leaver can help

As probate solicitors, Geoffrey Leaver can be involved as much or as little as you would like. Our specialist team can advise and assist you on a range of matters from the very simple to the very complex. Whatever the size and type of estate we can help.

We are experts in negotiating with HM Revenue & Customs to mitigate the amount of Inheritance Tax that is to be paid and we can also advise on post death variations of the Will to maximise the value of the estate.

If you have been appointed as an executor or a PR, we can support and advise you as you carry out your duties to wind up the estate. We are experienced in dealing with all sizes of estates.

Our services include:

• Registering the death and arranging the funeral (if requested).
• Applying for Grants of Probate/Letters of Administration.
• Establishing who is entitled as a beneficiary of the estate and locating missing beneficiaries.
• Identifying and administering the assets of the estate until they can be sold or distributed to the relevant beneficiaries.
• Dealing with any outstanding debts or liabilities of the deceased.
• Preparing and filing the necessary inheritance tax and income tax returns with HM Revenue & Customs.
• Contentious Probate – dealing with Will disputes.
• Distributing the estate and accounting to each beneficiary.

Assisting families through the Probate process necessarily involves investigating all aspects of a person’s life. Where relevant, we work closely with other professionals to ensure that you receive the most appropriate legal advice.

To make an appointment to speak to one of our Probate experts, Dagmara Kulczykowska, Ivone Joaquim, Catrina Saracino or Zak Barnaville, please call on 01908 689341 or contact us.

What our clients say:

“Thank you so much for all your hard work in closing my father’s estate, especially your work with the tax office”. Carole Humphries

For more information about how we can help, you can read testimonials from our private client services clients

CASE STUDY
We recently helped a mother whose son died of cancer. Although his mother was not fully aware of his wealth, our lawyers were able to ascertain the extent of her son’s assets and liabilities and also take care of the estate administration, including finalising her son’s income tax position, preparing the full HM Revenue & Customs Inheritance Tax Account, obtaining the Grant, collecting his assets and distribution. Our sensitive and professional approach helped take the stress out of and ease what was, naturally, a very upsetting process for his mother.